Blow for Novo’s insulin Tresiba

08.11.2012 - Novo Nordisk’s shares dropped after the FDA said that its long-acting insulin degludec had heart safety risks prior to a meeting of agency advisers.

With the ultra-long acting insulin analogon Tresiba (insulin degludec) filed for market authorisation, the Danish drugmaker wanted to take a piece of the cake of Sanofi’s bestseller Lantus, which made €3.9bn in sales last year. But after the US Food and Drug Administration (FDA) released a report questioning whether more safety studies should be conducted, analysts had doubts over Novo’s plans. “We see the risk of a significant delay to the U.S. approval as being substantially higher than before,” stated Jeffrey Holford, an analyst at Jefferies & Co. in New York. and downgraded the stock to "hold" from "buy". Prior to the news, Tresiba, which must be only taken once daily, was expected to make €1.1bn annually. After it shares dropped by almost 7%, the lowest value since last August.

In the FDA staff document, the cardiovascular risk of degludec is higher than previously published reports. However it is not clear if the FDA advisors will recommend them to conduct additional studies pre- or post-approval. According to analyst Martin Voegtli from Zurich-based Kepler Capital Markets, the most probable scenario is market authorisation in early 2013 with the obligation to conduct post-marketing studies to investigate the cardiovascular risk of degludec.

In summer, Novo claimed Tresiba to have a benefit over Sanofi’s Lantus in reduction of hypoglycemia but analysts seem sceptic. Tresiba has already gained market authorisation in Japan and was recommended for market approval by the EU CHMP in mid-October. Morgan Stanley analysts Peter Verdult and Chris Eccles said in mid-October that the see a 3% annual growth of Lantus in the €12bn diabetes market even after expiry of the patent in 2015 and competition by degludec. With Lantus Sanofi makes 20% of its profits. The analysts value Sanofi’s value at „overweight“.

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